zON GST RATE ON SERVICES AS RECOMMENDED BY THE GST COUNCIL IN ITS 37th MEETING HELD ON 20th SEPTEMBER, 2019

 

Rate reduction sector wise recommended for:

-        GST on hotel accommodation service and outdoor catering services.

-        Supply of job work services in relation to diamonds.

-        Supply of machine job work services in engineering industry except bus body building.

 

Exemption sector wise:

-        Recommended for processed agricultural product warehousing / storage service.

 

  • Clarification related to place of supply for:

-        R&D services provided by Indian pharma companies to Foreign Service recipients as location of service recipient.

-        Chip design software R&D services provided by Indian companies to foreign clients as location of service recipient.

 

  • Recommendation of reverse charge on renting of vehicle:

-        Renting of vehicle services provided by non-body corporate entities (opting to pay tax @5%) to body corporate entities would attract RCM @5%.

 

  • Rate reduction recommended on goods-

-        on cut and polished semi- precious stones to be reduced to 0.25%.

 

  • Rate increment recommended on goods-

-        Railway wagons, coaches, rolling stock (without refund of accumulated ITC).

-        Increased to 28% along with compensation cess @12% on caffeinated beverages.

 

  • Rationalization of rate recommended-

-        12% on Polypropylene / Polyethylene Woven and Non- Woven Bags and sacks used for packing of goods.

 

  • Reduction of compensation cess on vehicles-

-        Change in compensation cess on specified Passenger vehicle reduced to 1% for petrol vehicles and 3% for diesel vehicles.

 

  • Clarifications for applicability of GST rates recommended as: 

-        All “mechanical sprayers” falling under HS Code 8424 would attract 12% GST.

-        Solar Evacuation tubes, solar water heater, solar steam, generation systems would be eligible to 5% GST rate.

 

Note- The above recommended rate changes shall be made effective with effect from 1st October, 2019 by issuing further notifications.

 

(Law and Procedure related changes)

  1. Relaxation in filing of annual returns for MSMEs for FY 2017-18 and FY 2018-19 as

under:

Tax payer Required to file GST Annual Return
Composition tax payer (GSTR-9A) Not required
Normal tax payer having turnover up to two crore Not required
  1. New return system now to be introduced from April, 2020 earlier it was to be introduced w.e.f October 2019.
  1. Due date for filing GSTR-3B and GSTR-1 for the period October, 2019 to March, 2020 will be declared shortly.
  1. To link Aadhar with registration of taxpayers under GST and claiming refunds.